Bookmark & share:

E-mail this page E-mail a letter to the editor Reader Comments (below)

story tools
sponsored by

BY MATT WICKENHEISER
Blethen Maine Newspapers 08/08/2008

Blethen Maine Newspapers

The idea that Maine has one of the nation's highest tax burdens -- if not the highest -- has burned state officials for years.

Maine's high ranking, as calculated by the fiscally conservative Tax Foundation think tank, has been used in policy debates, in political rhetoric and letters to editors.

Turns out, however, it's just not true.

The Washington, D.C.-based Tax Foundation put out its yearly report Thursday, revising its historic numbers and putting out fresh data.

In fiscal year 2008, Maine ranked 15th nationwide in terms of state and local tax burden on residents.

The numbers indicate that Mainers had an average tax burden of 10 percent of their income.

In last year's report, the Foundation had Maine ranked second, after Vermont. But according to the revised numbers released Tuesday, Maine would actually have ranked 14th.

Likewise, in 2006, the group had Maine as the top state for tax burden.

But the revised numbers have Maine at number seven.

In fact, at no time was Maine ranked higher than five.

"We think this will help end the myth about Maine being the highest-taxed state in the country," said David Farmer, spokesman for Gov. John Baldacci. "We didn't think it was true."

Added House Majority Leader Hannah Pingree, D-North Haven: "It's helpful to have accurate facts."

Essentially, what's changed is the Foundation has separated from Maine's overall tax collections the property taxes paid by out-of-staters who own second homes here.

It's also factored in taxes paid by Mainers to other states -- either because they work there, or because they own property there.

The net result has been a drop in ranking. Before that was done, Maine's tax collections were divided by a residents-only pool of people, and compared to the state per-capita income of $38,309.

It's a change Maine officials have pushed for years, complaining that the study was skewed. But because of data limitations, the Foundation wasn't able to calculate what Mainers were paying in out-of-state taxes. So it didn't subtract the out-of-staters paying taxes to Maine, said William Ahern, the Foundation's director of communications.

New statistics and numbers have become available from the Census, Bureau of Economic Analysis, trade groups and other sources, Ahern said. "Every year, more and more data sets become available," said Ahern. "This study is now leaps and bounds ahead of what it was just a few years ago.

"Not that it's perfect, but it's a much truer picture of Maine's tax burden." The changes aren't centered on Maine; the new calculations have moved many states around on the list."

Asked if it was a correction, or if the numbers had been wrong for years, Ahern answered, "In government, we call that a revision. That's all it is."

Maine's top -- or near-top -- ranking has been a key part in ideological arguments in the states for several years.

"It's been a convenient statistic to point to when you've had an ideological argument about the nature of state government or what government should be," said Farmer. "It's been useful for folks who have wanted to beat government up."

Sen. Joseph Perry, D-Bangor, chairman of the Legislature's Taxation Committee, said it was "catchy" to call the state No. 1 in taxes. "It made a great way for folks who are interested in discrediting us, opposing things we're working on," said Perry. "I think this is a much more accurate, realistic assessment, but it hasn't lowered anybody's tax bill. I'd like to lower our ranking, but through burden reduction."

That was a sentiment reflected by everyone reached for this article. House Minority Leader Joshua Tardy, R-Newport, said he was encouraged the state doesn't "have that albatross hanging around our neck."

"We're at a point where we think the people understand that the tax burden has to go down, no matter what the rank is in any comparative analysis," said Tardy. "It's frankly too high in Maine."

Pingree said Maine's recent efforts for education consolidation and work on the circuit breaker program have advanced tax reform. But her House caucus still saw a real need for further tax work, she said.

Farmer said property taxes, in particular, need to drop. "We still have a way to go," he said.

Sen. Richard Nass, R-Acton, a member of the Taxation Committee, said those people who work on tax policy in the state have agreed that taxes are too high. The high rankings in the past, he said, have been useful to get the attention of Mainers who aren't paying attention to the problem.

Tardy suggested there were other indicators Maine should look at to chart economic vitality, including business friendliness ratings, job creation numbers, unemployment rates and others.

"Tax burden is just one of the many indicators," he said.

Ahern, from the Foundation, noted that Mainer's ranked 15th in terms of tax burden, but 34th in per capita income -- which came in at $38,309.

"We might suggest that even though we've made this correction, maybe the tax burden is still a little high," said Ahern. "We'd like to see those numbers closer together."

Bookmark and share this story: